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Agglomeration economies in European and American cities

Author

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  • ZENOU, Yves

    () (CERAS, Ecole Nationale des Ponts et Chaussées, 28 rue des Saints-Pères, 75007 Paris, France)

Abstract

We consider two types of cities. In the European one the amenities are located at the city-center (like e.g. Paris or London) whereas in the American-type city the amenties are at the city-edge (like e.g. Detroit, Los Angeles). We first show that the unemployed reside at the vicinity of the city-center in the American-type city while they locate at the outskirts of the city in the European one. We then establish conditions for the endogeneous formation of monocentric European and American cities and compare them. It turns out that the employed workers are better off in European cities whereas the unemployed and firms are worse off, that land rent is cheaper in American cities and that the number of trips devoted to amenities and to work affect differently workers' utilities and firms' profits in the two cities.

Suggested Citation

  • ZENOU, Yves, 1999. "Agglomeration economies in European and American cities," CORE Discussion Papers 1999002, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:1999002
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    File URL: https://uclouvain.be/en/research-institutes/immaq/core/dp-1999.html
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    References listed on IDEAS

    as
    1. Wheaton, William C, 1977. "Income and Urban Residence: An Analysis of Consumer Demand for Location," American Economic Review, American Economic Association, vol. 67(4), pages 620-631, September.
    2. Daniel Cohen & Arnaud Lefranc & Gilles Saint-Paul, 1997. "French unemployment: a transatlantic perspective," Economic Policy, CEPR;CES;MSH, vol. 12(25), pages 265-292, October.
    3. Fujita,Masahisa, 1991. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521396455, December.
    4. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, December.
    5. repec:cor:louvrp:-1370 is not listed on IDEAS
    6. Hochman, Oded & Ofek, Haim, 1977. "The Value of Time in Consumption and Residential Location in an Urban Setting," American Economic Review, American Economic Association, vol. 67(5), pages 996-1003, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    agglomeration; endogeneous location of workers and firms; location of amenities; urban unemployment.;

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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